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ELLIOTT WAVE ANALYSIS - Latest Market Commentary

Stock Indices

The Nasdaq Composite’s all-time high traded in March 2000 at 5132.50 is fast being approached although the media has already trumpeted a new record closing high last Thursday. In the excitement, one analyst calls for a continued exponential rise to 10,000.00, in effect, doubling during the next year! Ludicrous! Even basis our ‘inflation-pop’ scenario, this is not possible in the time-frame intended especially as we expect a -20% to -25% decline beforehand. But the interesting aspects of the Nasdaq’s break to a new record is the fact that it negates the concept of its dot.com bust/decline unfolding into five waves ending into the Oct.’02 low. This was still a precept### of maintaining a secular bear forecast during its recovery phase of the last 12+year period. Now that its high is being broken, it opens the way to imagine the ‘inflation-pop’ will ultimately unfold as reality, to higher levels once a corrective decline has completed this year. The S&P is flagging several warning signs as it also extends the Oct.’14 upswing towards another record high. The magical 2140.00+/- level is being approached – this has been our ultimate upside target for the last several years and it has been derived from measuring a zig zag upswing from the March ’09 lows. Its implication is this – upon completion, it would usher in a secular bear decline. Whilst the 2140.00+/- level remains valid, a subsequent decline could still develop into a counter-trend 4th wave that sheds prices by -20% to -25% but forcing the Federal Reserve into another round of quantitative easing. That would begin a 5th wave upswing into the future. This is becoming more realistic now that the Nasdaq is invalidating the timing of a secular bear beginning at this time by breaking into a new record high. Whilst the S&P approaches the resistance towards 2140.00+/-, European indices still march higher and it may take a little longer, another month for these to complete their final five wave impulse patterns from the Oct.’14 lows. Asia is following the same theme as Europe so we must be patient in order to synchronise with more imminent topping formations in the U.S. 25th April 2015

Financial Updates Currencies

Currencies (FX)

Bound within their multi-week contracting symmetrical triangle patterns, both the US$ index and the Euro/US$ are approaching short-term support/resistance levels. Should these levels hold, the ‘d’-waves are about to unfold, with next targets measured into the lower 99.00+/- range for the US$ and towards 1.0598-74 for the Euro/US$. Typically, a triangle occurs as the penultimate leg within the larger sequence. This implies the continuation of the larger trend once ###the triangle completes and thus reinforces the bullish outlook for the US$ index for the next few months whilst it allows the Euro/US$ to continue lower, close to parity. Sterling/US$ continued its strong rally from the April low and even exceeded the interim late-March high of 1.5169. This corroborates our expanding flat short-term pattern that is now nearing completion. A reversal is expected at the fib. 23.6% extension ratio of wave ‘a’ of the pattern. Once verified, the larger downswing is forecast to continue towards unchanged downside objectives in the 1.4300+/- range. US$/Yen is still trading in the 11833-12085 range but very short-term volatility is picking up which suggests a break-out of that area soon. Although the preferential scenario that depicts a top at the 12202 level still prevails, it is finely balanced with our alternate count that allows for one additional higher high in the months ahead. The next sessions could be decisive for the US$/Yen’s directional bias of the next months. . 25th April 2015

Financial Updates Bonds

Bonds (Interest Rates)

The main drivers for the interest rate market continues with the timing of interest rate rises in the U.S., continued quantitative easing and bond purchasing in Europe and the probability of a Greek exit from the European Union. Furthermore, Bill Gross of Janus has said in his latest note that the German 10yr Bund (futures) is a ‘short of a lifetime’ as the DE10yr yield approaches zero per cent. Despite the April U.S. Durable Goods figures coming in at +4%, much better### than expected, the US10yr yield declined last Friday ending the session at 1.919%. It continues to attract buyers over German bunds especially whilst anxiety persists given latest comments from European Commission officials that insist that no Greek funding will be available unless the government undergoes a major reform. The US10yr yield is still holding above the early April low of 1.798% validating the uptrend already in progress since last February but its failure to unfold higher into a five wave impulse pattern leaves open the possibility that a break below 1.798 will trigger alternate counts that extends the multi-month double zig zag decline for a return back to the July ’12 record lows. Meanwhile the DE10yr yield is holding above recent lows of 0.043% - we expect near-term upside potential during the next several weeks towards 0.498% before resuming lower again. 25th April 2015

Commodities

Headline news that the Nasdaq Composite index was set to close into a new 15-year record high combined with analysts upgrading price targets for Amazon to US$500 a share attracted funds into stocks whilst liquidating long positions in precious metals. During Friday’s trading, gold underperformed silver by breaking below its support at 1178.32 whilst silver held its ground around the 15.70+/- level. Whilst we continue to forecast gold trading lower into mid-June ###towards long-standing targets at 1096.00+/- and silver to 13.61+/-, there still remains a heightened probability that prices will first trade higher during the next few weeks. Both gold and silver unfolded into five wave patterns during the March upswing so these latest declines represent a correction prior to another advance later this month. Despite this however we expect the US$ dollar to resume higher soon which normally translates into weaker precious metals so we await confirmation of gold and silver to undergo a short-term reversal signature to validate a higher attempt before staging its final sell-off. Both Crude and Brent oil approach upside resistance, Crude oil at 60.20 and Brent oil at 67.50+/-. Should price rejection occur then such action would confirm prices staging an additional but final decline into the June time-period. Crude oil has potential to briefly trade below its March low although we do not see a replication of this for Brent oil – rather, these are the last attempts prior to a durational uptrend development. 25th April 2015

LATEST ARTICLES

THE ‘INFLATION-POP’ - PRECIOUS METALS SET TO SURGE INTO RECORD HIGHS

Bloomberg hosted a Precious Metals Forum on 23rd May and WaveTrack International was invited to present our latest Elliott Wave price-forecasts. The event was sponsored by the CME Group and Johnson Matthey.

OUTLOOK & FORECASTS FOR 2013

Highlights:

  • The 2013 outlook for global stock indices and commodities remains very bullish and is entering the last stage of the ‘inflation-pop’ phase that originally began from the post-financial crisis lows of 2008/09
  • This is expected to ignite another period of asset buying that increases risk-on multiples by a minimum 45% per cent and in some cases as much as +300% per cent, sending some global stock indices and commodities into record highs
  • Shorter-term, there is a danger of a downward adjustment of -5-8% per cent, but then sharp price advances to resume
  • Commodity related stock indices and equities are expected to outperform as a sector during the next 12-16 months
  • Banking stocks to participate, but most will not exceed their pre-financial crisis highs

As always, this year’s Outlook & Forecasts for the next twelve months are created applying the Elliott Wave Principle for the assessment of pattern and price amplitude, also Cycle Analysis for the timing of the larger trend reversals. Not always do they jive, but they seldom contradict and more often, provide valuable insights into one or two variations of a similar theme within a seemingly unlimited amount of possibilities.

Even though this report outlines the price expectancy of all asset classes for 2012 it will also illustrate how this coming year fits together into the larger picture. The reasoning behind this is to move away from the 'black-box' stereotype and show you why the results relate to their specific outcome. Overall, this report deals with two different time-periods – long-term and inter-mediate term. Long-term refers to the uptrends from the Great Depression of 1932 onwards and inter-mediate term for the coming year and into 2013.

HOW TO INTERPRET EACH ELLIOTT WAVE CHART

What do you see when looking at an Elliott Wave chart? Just lots of numbers & letters overlaying the price data? – or do you see definable patterns that are immediately familiar? And how do you interpret the results of the analysis and put it into an effective trading plan? Read on and test your own knowledge of these subjects and much more...

A COMMODITY SUPER-CYCLE?

Recent reports of a Commodity Super-Cycle grabbed my attention for two reasons – first, this is diametrically different to the outlook I foresee developing during the next decade, and second, this terminology has surfaced at a time when various commodities have already undergone large percentage gains measured from the Feb.'09 lows

THE 'DEFLATIONARY SCENARIO'

The primary theme of this presentation focuses on a 'Deflationary' outlook, forecast as the dominant aspect continuing during the next decade. This is derived from analysing the Elliott Wave pattern structure of the CRB (Cash) Index during its expansionary period of the last 76 years.

THE 'FLASH CRASH'

The Update Alert! messaging service of EW-Forecast Plus responded to the sharp collapse and the following recovery of US stock indices during the volatile trading session on the 6th May.

OUTLOOK FORECASTS FOR 2011

This analysis centres around the S&P 500 that is used as a proxy for other global indices. The great bull market beginning from the 1932 low ends 68 years later in 2000 - other global indices peaked later in 2007 (75yrs) – some still continuing to progress.

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"I just wanted to congratulate you on the EW-Compass reports launch. I'd say all the work you've all put into this project is well worth it… never cease to be amazed by the harmony that you find between the fib relations you highlight and the Elliott count you propose. You are a true descendant of RNE, and I'm quite sure he'd have really loved to see your work… Another aspect that sets you apart is your deep knowledge of the how and why of pattern relationships between higher & lower degrees of the same price action. So much to learn there". - T.S.

ELLIOTT WAVE PATTERN

INTRODUCTION TO THE WAVE PRINCIPLE

The Wave Principle, often referred to as Elliott Wave is a unique methodology that applies Natures Laws, those encompassing the Natural Sciences and Universal Geometric Philosophies to the financial markets. It allows us to view price fluctuations as an organised process that can be non-linearly extrapolated to gain a glimpse into the future direction of trends, counter-trends and amplitudes on any market or contract traded around the world.

Expanding Diagonal Patterns - Do they actually exist? - Elliott's inclusion of the Contracting Diagonal

In R.N.Elliott's original treatise of "The Wave Principle (1938)", he introduces us to diagonal patterns for the first time on page 21. Under the heading, Triangles, Elliott describes the difference between horizontal triangles that represent hesitation within an ongoing, progressive trend and diagonal triangles that form the concluding 5th wave of a larger five wave sequence.

NEWS & EVENTS

Tradersworld Online Expo #12 – Starts 12th November 2012

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 12th Trader Expo held online for 7 weeks starting on 12th November 2012 and ending in the new year on 6th January 2013. Peter’s presentation is entitled “Elliott Wave Price Forecasts & Cycle Projections – Three Phases of the 18 Year Bear Market ~ ‘Shock–Pop–Drop’” for more information visit http://tradersworldonlineexpo.com/

Announcement: 123rd Battery Council & Trade Fair Convention in Miami, 1-4 May 2011

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 123rd Trade Fair Convention of the Battery Council in Miami, 1-4 May 2011. Peter’s presentation is entitled "The Historical Price Trend of Lead and Applying the Elliott Wave Principle to plot its course into the Future".

ELLIOTT WAVE PRICE-FORECAST UPDATES